It’s been a difficult experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from its previous high in November 2021. And just when things were getting worse and down, the FTX crash turned things worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
Government regulations
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that can raise prices.
raw airdrop crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be developed upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto increase it will be more convenient for individuals to purchase and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long haul Being patient and disciplined will be key.